Highlights
The consumer sentiment index held steady at a solid 98.8 for preliminary May led by a modest gain in the expectations component, now at 89.5, which offset a slight dip in the assessment of current conditions, at 113.3. Year-ahead inflation expectations edged 1 tenth higher to 2.8 percent, a level last matched back in March this year but not surpassed since March 2015. There no hints in today's report of a burst higher for consumer spending nor for inflation, though the results are consistent with moderate strength for both.

Consensus Outlook
The consumer sentiment is expected to move higher in the preliminary reading for May, to 99.0 vs April's final reading of 98.8 and well above April's mid-month reading of 97.8. This index has been edging off unusually strong readings earlier in the year, gains triggered by this year's tax cut. Inflation expectations in this report, which are closely watched, have been very soft.

Definition
The University of Michigan's Consumer Survey Center questions 600 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending. Consumer confidence and consumer sentiment are two ways of talking about consumer attitudes. Among economic reports, consumer sentiment refers to the Michigan survey while consumer confidence refers to The Conference Board's survey. Preliminary estimates for a month are released at mid-month. Final estimates for a month are released near the end of the month.
Why Investors Care

Consumer sentiment is mainly affected by inflation and employment conditions. However, consumers are also impacted by current events such as bear & bull markets, geopolitical events such as war and terrorist attacks. Investors monitor consumer sentiment because it tends to have an impact on consumer spending over the long run [although not necessarily on a monthly basis.]